United Electric Co.,, Chirala v. THE CIT,, Guntur

ITA 353/VIZ/2013 | 2009-2010
Pronouncement Date: 02-04-2014 | Result: Dismissed

Appeal Details

RSA Number 35325314 RSA 2013
Assessee PAN AABFU2361D
Bench Visakhapatnam
Appeal Number ITA 353/VIZ/2013
Duration Of Justice 10 month(s) 15 day(s)
Appellant United Electric Co.,, Chirala
Respondent THE CIT,, Guntur
Appeal Type Income Tax Appeal
Pronouncement Date 02-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 02-04-2014
Date Of Final Hearing 28-02-2014
Next Hearing Date 28-02-2014
Assessment Year 2009-2010
Appeal Filed On 17-05-2013
Judgment Text
ITA NO.353/VIZAG/2013 M/S. UNITED ELECTRIC CO. CHIRALA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NO.353/VIZAG/2013 ASSESSMENT YEAR : 2009-10 M/S. UNITED ELECTRIC CO. CHIRALA VS. CIT GUNTUR (APPELLANT) (RESPONDENT) PAN NO.AABFU 2361D ASSESSEE BY: SHRI SHRI A.C. GANGAIAH CA REVENUE BY: SMT. KOMALI KRISHNA ADDL. CIT DATE OF HEARING : 07.03.2014 DATE OF PRONOUNCEMENT : 02.04.2014 ORDER PER J. SUDHAKAR REDDY ACCOUNTANT MEMBER:- THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE INCOME TAX COMMISSIONER PASSED UNDER THE SECTION 26 3 OF THE INCOME-TAX ACT ON 04.03.2013 ON THE FOLLOWING GROUNDS: 1. (A) REASSESSMENT PROCEEDINGS INITIATED DISTURBS THE COMPLETED ASSESSMENT ORDER. REASSESSMENT ORDER WILL BE AVAIL ABLE AFTER COMPLETION OF REASSESSMENT PROCEEDINGS. IS REVISIO N U/S 263 PERMITTED BEFORE COMPLETION OF REASSESSMENT PROCEED INGS INITIATED? (B) WHETHER DISTURBED ASSESSMENT ORDERS AFTER INIT IATION OF REASSESSMENT PROCEEDINGS BE TAKEN AS PREJUDICIAL TO THE INTERESTS OF REVENUE? (C) WHETHER % OF PROFITS BE ESTIMATED IGNORING NORM AL RATE OF PROFITS DISCLOSED BY THE APPELLANT IN EARLIER YEARS WITHOUT FINDING ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED? 2. WHETHER NON-DEDUCTION OF INTEREST PAID TO PARTNER A ND REMUNERATION PAID TO PARTNERS FROM THE ESTIMATED PR OFITS IS ALLOWED AS PER SETTLED LAW? 3. WHETHER DIRECTION TO TAX RECEIPTS DUE TO BUSINESS O PERATIONS UNDER HEAD INCOME FROM OTHER SOURCES IS VALID? 4. WHETHER ASSESSMENT ORDER MERGED WITH THE ORDER U/S 263 IS AVAILABLE FOR REASSESSMENT? 5. TO PERMIT THE APPELLANT TO RAISE ANY OTHER GROUND A T THE TIME OF HEARING OF THE APPEAL. ITA NO.353/VIZAG/2013 M/S. UNITED ELECTRIC CO. CHIRALA 2 2. THE LD. COUNSEL FOR THE ASSESSEE MR. A.C. GANGAI AH SUBMITTED THAT THE ORDER U/S 263 OF THE ACT WAS PASSED REVISING THE OR DER PASSED U/S 143(3) OF THE ACT ON 29.03.2011 AND WHEREAS THIS ORDER PASSED U/S 143(3) OF THE ACT WAS NO MORE IN EXISTENCE FOR THE REASON THAT A NOTI CE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE REOPENING THE ASSESSMENT PA SSED U/S 143(3) BY THE ASSESSING OFFICER. HE REFERRED TO THE NOTICE U/S 1 48 OF THE ACT DATED 28.6.2012 WHICH WAS SERVED ON THE ASSESSEE ON 3.7. 2012 AND SUBMITTED THAT AS THERE WAS NO SURVIVING ORDER U/S 143(3) O F THE ACT DATED 29.3.2011 THE REVISION IS BAD IN LAW. ON MERITS HE SUBMITTE D THAT THERE IS NO ERROR OR PREJUDICE CAUSED TO THE REVENUE AND THE CIT(A) IS W RONG IN REVISING SPECIFICALLY WHEN THE ASSESSEE HAS AGREED TO AN ADD ITION OF RS.1 10 423/- VOLUNTARILY. 3. THE LD. D.R. SMT. KOMALI KRISHNA ON THE OTHER HA ND SUBMITTED THAT THE PROCEEDINGS U/S 148 OF THE ACT WERE DROPPED BY THE ASSESSING OFFICER PRIOR TO THE INITIATION OF PROCEEDINGS U/S 263 OF T HE ACT AND HENCE THE ARGUMENTS OF THE ASSESSEE IS WRONG. ON MERITS HE SUBMITTED THAT SECTION 263 IS VALIDLY PASSED AS THE ASSESSING OFFICER HAS COMMITTED AN ERROR IN NOT ESTIMATING PROFITS FROM VAT 12.5% SALES OF RS.45 1 7 082/- AND VAT 4% SALES OF RS.97 01 990/-. SHE ALSO POINTED OUT THAT BROKERAGE RECEIPTS AND HONORARIUM WERE ALSO NOT BROUGHT TO TAX IN AN ORDE R OF ASSESSMENT PASSED U/S 143(3) DT. 29.3.2011. 4. IN REPLY THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT PROFIT MAY BE ESTIMATED AT 5% OF VAT 12.5% SALES AND VAT 4% SALES AND DEDUCTION BE GRANTED ON ACCOUNT OF INTEREST AND REMUNERATION TO PARTNERS. 5. AFTER HEARING THE RIVAL CONTENTIONS WE HOLD AS FOLLOWS. 6. THE NOTICE ISSUED U/S 148 OF THE ACT WAS DROPPED BY ASSESSING OFFICER AND THERE AFTER PROPOSALS FOR SECTION 263 OF THE AC T WERE INITIATED. HENCE THE FIRST GROUND OF THE ASSESSEE DOES NOT SURVIVE. COMING TO THE ISSUE WHERE THERE IS AN ERROR IN THE ORDER OF THE ASSESSING OFF ICER PASSED U/S 143(3) OF THE ITA NO.353/VIZAG/2013 M/S. UNITED ELECTRIC CO. CHIRALA 3 ACT ON 29.3.2011 WHICH IS PREJUDICIAL TO THE INTER EST OF REVENUE WE HOLD THAT THE ASSESSING OFFICER WHILE ASSESSING THE INCOME FAILED TO ESTIMATE PROFIT FROM VAT AT 12.5% SALES OF RS.45 17 082/- AND VAT 4 % SALES AT RS.97 01 990/. THUS ON THIS COUNT THE ORDER OF THE CIT(A) U/S 263 OF THE ACT HAS TO BE UPHELD. 7. THE LD. COUNSEL FOR THE ASSESSEE REQUESTED THE B ENCH TO DIRECT ESTIMATION OF INCOME ON THE SALES AT A PARTICULAR P ERCENTAGE AND ALSO TO DIRECT GRANT OF DEDUCTION ON ACCOUNT OF INTEREST PAID TO P ARTNERS ETC. WE ARE NOT INCLINED TO GIVE ANY SUCH DIRECTION AS WE ARE SURE THAT THE ASSESSING OFFICER SHALL CONSIDER ALL THE FACTS AND CIRCUMSTANCES OF T HE CASE AND ESTIMATE THE PROFIT AS PER THE PROVISIONS OF THE ACT AND ALSO GR ANT THE DEDUCTIONS THAT ARE LEGALLY DUE TO THE ASSESSEE. ANY DIRECTIONS BY THE CIT TO THE CONTRARY ARE HEREBY VACATED. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL 2014 SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS VISAKHAPATNAM DATED 2 ND APRIL 2014 COPY TO 1 M/S. UNITED ELECTRIC CO. ANDHRA RATHANA ROAD CH IRALA-523 157 2 THE CIT GUNTUR 3 THE CIT(A) VISAKHAPATNAM 4 THE DR ITAT VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM